As a result, we are now seeing the
emergence of data-driven societies around the globe. Feudalism 2.0, fascism
2.0, communism 2.0, socialism 2.0, democracy 2.0 and capitalism 2.0 can now be
built.

What framework should we choose? What would be the implications?

In the recent past, we have seen companies and governments around
the world collect increasing amounts of personal and other data. This has been
justified with better customer experience and with security issues, e.g. the
need to fight organized crime and international terrorism. However, statistical
investigations do not confirm that mass surveillance is more efficient in
identifying and preventing terrorism than conventional means.
In fact, all individuals who have recently committed terror attacks in Europe
were known to be potentially dangerous extremists before.Nevertheless, the attacks have not been prevented. Therefore, can mass
surveillance ever serve the declared purpose? And if not, why is it so
energetically pursued?

Recently, it has become increasingly clear that personal data about
everyone of us is not only collected for the sake of personalized
advertisements, services and products, but also politically used in various
countries. The keyword here is "Big Nudging", i.e. the combination of
methods from behavioral economics ("nudging") and Big Data to
manipulate the attention, opinions, decisions, and behaviors of people.The more data is available about us, the easier it becomes to manipulate us
subconsciously, i.e. without our awareness. It is suggested that this method would
be used to make us behave in a healthier and environmentally friendly way, but
it has also been applied to manipulate public opinion and elections.
Politics has started to notice the danger of this approach, which enables new
kinds of propaganda and misinformation, while it also undermines social
cohesion by means of the "filter bubble effect". Furthermore, it reduces critical thinking, which makes people vulnerable to
populist and extremist opinions.

...the use of Big Nudging and Citizen Scores would increasingly reduce
the freedom of decision-making of citizens and with this, the ability to
control their own lives.

Nevertheless, Big Nudging is not as effective as desired in reaching
its health- and environment-related goals.
Therefore, companies and countries like China have started to introduce Citizen
Scores that rate peoples' behaviors, including the links they click in the
Internet.
These scores would then determine the interest rates of loans offered, health
benefits, travel visa, or jobs one might get. In such a way, it is easy to
create a "digital nose ring" to make us do certain things. As a
consequence, the use of Big Nudging and Citizen Scores would increasingly reduce
the freedom of decision-making of citizens and with this, the ability to
control their own lives. It recently becomes clear that this approach can be
highly invasive: We are told to do 10,000 steps every day. The calories and
kinds of food we eat become increasingly measured. The accumulated information
might be used to decide who is entitled to get certain kinds of health services
and who not. Since gene sequencing is cheap and gene editing is possible (e.g. with
the Crispr CAS-9 method), experts, furthermore, think about eliminating
diseases by "selective breeding".
Various countries have also built detainment camps for millions of people,
in order to be able to manage pandemics, future disasters, and social uprisings.
The refugee camp in Idomeni, Macedonia, is a sad example of how such camps may
be operated. Taking
all of this together, there are currently many signs of an upcoming new totalitarism
- a digitally empowered political regime that would be highly privacy-invasive
and potentially more dictatorial than any political regime we have seen in the
past.

...related to the limitations of Big Data analytics (e.g. the
fact that correlations do not mean causality and that more data imply more
spurious patterns- the well-known over-fitting problem).

One reason for this development seems to be related to a serious
misunderstanding of what Big Data can accomplish. Since Chris Anderson's claim
that "the data deluge makes the scientific method obsolete", the idea
has spread that one could optimize the world and rule it like a benevolent dictator,
if one just had enough data.
It sounds extremely plausible that "more data is
more knowledge, more knowledge is more power, and more power is more success." In the meantime, however, Data Scientists have realized that there
are many traps one can fall into. These are not only related to the limitations of Big Data analytics (e.g. the
fact that correlations do not mean causality and that more data imply more
spurious patterns- the well-known over-fitting problem). It is also related to
the fact that data volumes grow faster than processing power and systemic
complexity grows even faster than data volumes.
Therefore, good theories are needed to decide what subset of data should be
processed and how. Furthermore, there is no scientific method to determine the
right goal function: should it be gross domestic product per capita (GDP) or
sustainability, power or peace, happiness or life expectancy, or anything else?
In modern complex societies, the common answer to this dilemma has been
pluralism. We should not give up on it, because this would make our society
more vulnerable: pluralism allows for diversity, which is the basis of high
innovation rates, collective intelligence and societal resilience (it hedges
risks and can better cope with uncertainty).

I am writing all this, because
democracies worldwide have repeatedly been questioned and come under pressure.
In Europe, we have seen this in Hungary, Poland, France, and Turkey, but also
elsewhere. In fact,
it is now possible to build data-driven versions of well-known historical
political systems: fascism
2.0, communism 2.0, feudalism 2.0, capitalism 2.0, and democracy 2.0. Our
societies are at a crossroads (or, scientifically speaking, at a tipping point).
As a consequence, we should make up our minds and take a conscious decision. We
need a public debate to determine the path we want to take. In the following, I
will try to sketch some implications of the various data-driven models
mentioned above.

Fascism 2.0 - the Big Brother
and Brave New World Society: This system is turning majority opinions into social norms, laws,
and regulations with little protection of human rights, particularly those of
minorities. It leads to a populist governance supported by a propaganda
apparatus that is controlled by government and business elites. In the
beginning, resources of minorities are redistributed to the majority, which
increases the popularity of the government. Eventually, however, the loss of
diversity leads to a lack of innovation, which undermines the success of the
economy and the functionality of the society. To counteract the resulting
destabilization of the socio-economic system and overcome the shortage of
resources, fascist societies typically end up in wars. They also tend to value
diverse people differently (e.g. to attribute a lower value to certain
ethnicities, groups or religions), which can lead to ethnic cleansing and social
sorting. A trend towards fascism 2.0 can be seen in several countries today,
also in Europe.

Communism 2.0 - the Big
Mother Society:
This system is pursuing a benevolent dictator approach, trying to optimize the
state of society. The paternalistic caring state,
which engages in Big Nudging, clearly has elements of this. Communism 2.0
imposes values, norms, and forms of life on people. Communism 2.0 engages in a centralized,
top-down planning of the use of resources. In this process, the goals are set
by the government. In many cases, this includes the re-distribution of
resources from certain elites to a broader public. However, communism 2.0 undermines
competition, innovation and entrepreneurship, thereby reducing the amount of
resources available, ending up in a desolate economic situation that requires the
government to ration resources.

Feudalism 2.0 - the Big Other
Society (called surveillance capitalism by some people): This system amasses huge amounts
of customer data and basically turns citizens into products. The system is
based on the accumulation of resources and power in the hands of a small business
elite, which is said to be in favor of an efficient use of resources
("economies of scale").However,
there are also undesirable side effects such as the misuse of power, relatively
low innovation rates, and too-big-to-fail problems (as we have seen them in the
financial sector).

In
some economic sectors, the accumulation of resources and power has created
quasi-monopolies. Typically, the related monopolists, oligarchs or plutocrats demand
the right of breaking the rules(which is often framed as "creative destruction") and to determine
the rules of the future. Some IT giants in Silicon Valley's openly admit that
they consider democracy an "outdated technology". It appears that
they want to replace it by a new, data-driven, world-spanning operating system S
to overcome the limitations of nation-based politics.

All
three of the above governance systems (i.e. fascism 2.0, communism 2.0, and
feudalism 2.0) are run with Big Data and Artificial Intelligent technologies
(smart algorithms). They are all operated in a top-down way and imply severe
breaches of basic democratic principles and achievements that many societies
have fought for over thousands of years. In the following, I will continue with
a discussion of novel, data-driven forms of society that have strong bottom-up
components: democracy 2.0 and capitalism 2.0. Here, "big solutions"
are replaced by the "glocality" principle: "think global, act
local".

Democracy 2.0: This system recognizes the
important role of pluralism and diversity for high innovation rates, societal
resilience, and collective intelligence. It understands that socio-economic and
cultural diversity is just as important as biodiversity, which requires a
proper protection of minorities and human rights (including informational
self-determination). It is committed to a division/separation of powers as a
means of balancing the interests of different stakeholders and ensuring peace.
It also offers participatory opportunities for citizens in recognition of the
importance of civic engagement for a thriving society. It provides freedoms to
citizens in exchange for responsible behavior, and therefore invests in the
education and enlightenment of its citizens.

The
above principles may be seen as the lessons learnt over centuries - from many
wars and revolutions. As the complexity and diversity of socio-economic systems
has increased over historical periods of time, overall, their degree of
participation has increased as well. Democracy may, therefore, be seen as a
governance form enabling diversity and turning it into public and private benefits.

...digital assistants may use artificial intelligence algorithms, but would act on
behalf of their users rather than trying to control them on behalf of companies
or governments.

However,
high levels of complexity and diversity also imply significant challenges.
These can now be addressed by personal
digital assistants helping individuals and companies to coordinate their
activities and interact more successfully. Such
digital assistants may use artificial intelligence algorithms, but would act on
behalf of their users rather than trying to control them on behalf of companies
or governments. The important point is to build digital platforms, which support
efficient cooperation, online deliberation, and collective intelligence.
Supporting better decision-making, responsible (inter)action,
self-organization, and self-regulation will be key to eGovernance, in
particular to what I call "governance 4.0". I will discuss this in
more detail below.

Capitalism 2.0: This system is built on
liberalism, i.e. civil and entrepreneurial freedoms in favor of high innovation
rates. It is largely organized in a bottom-up way, i.e. based on
self-organization and self-regulation. It is, therefore, flexible, efficient,
adaptive and resilient. Strong reward mechanisms for inventions and creative
products or services are the fuel of the success of this system.

A
novel aspect of capitalism 2.0 is the overwhelming importance of network
interactions. As a consequence, everything we do has side effects, feedback
effects, or cascading effects, and "systemic thinking" or -
differently phrased - "ecosystems thinking" becomes key to long-term
(sustainable) success.In
fact, the nations with the most diverse product space are those that thrive
most."Ecosystems
thinking" also implies new forms of competition, which are combined with
cooperation (so-called "co-opetition"). This is reflected by the
important roles that co-creation, co-evolution, and collective intelligence
play in the now emerging digital economy. As I
will elaborate later on, this new form of capitalism will be catalyzed by a new
kind of financial system, which will fix current environmental, social, and
unsustainability issues: "finance
4.0".

The perfect storm: Resource shortages and other crises

Before
I discuss what governance model we should choose, we first need to discuss the
situation our society is faced with. Obviously, we are confronted with an
unsolved financial, economic and spending crisis, with unstable peace, with climate
change, and with cyber threats, to mention just a few of our existential issues.
A closer analysis reveals that they may all be rooted in a single problem: our
unsustainable way of life. Industrialized countries are currently consuming 3.5
to 4.5 times the amount of renewable material resources. For some time, they
managed to keep up their lifestyle by means of globalization, which made resources
from other countries accessible. Now, however, globalization has reached its
limits, as the exploitation of other celestial bodies is not yet possible.

Already
in 1972, when the Club of Rome published "The Limits to Growth", it
became clear that we might run into such a situation. The analysis triggered controversial
debates, but it was followed up and basically confirmed by the Global 2000
report issued by the US president, and it was further refined by its update. Initially,
these studies have fueled an environmental movement towards the protection of
our planet and more responsible consumption. Then, however, industry and public
media kept suggesting for decades that there was no problem, supporting excessive
consumerism. If we were running short of a certain resource, it was argued,
engineers would come up with a solution that would fix the problem. The same
circles kept pointing out that there would be no man-made climate change
problem. This allowed them to do business as usual.

The
"Limits to Growth" and Global 2000 studies particularly stressed that
there was an impending oil shortage and an overpopulation problem. By the end
of the 21st century, our planet would host significantly less people (more than
one billion people less than during the period of highest population, which is
expected to occur around the year 2030). Back in 1973, during the first oil
crisis, many public roads were closed during weekends (for example, in Germany).
Since then, for the naive consumer it appears that the problems have been
solved. In many areas of the world, energy consumption has even doubled. In
fact, we are not yet running out of oil. However, problems are expected to
occur as soon as the global production rate of oil goes down or oil production
gets less efficient, i.e. more energy and effort is required to get it out of
the soil.
The potential trouble becomes clear when considering that most of our economy
today depends on oil. It fuels production processes and transportation
worldwide. It is used to produce plastic and other materials. It is required to
produce fertilizer, i.e. it is needed for global food production. In fact, the
world population has increased by a factor of 6 in the past 150 years as a
result of the oil-based economy. So, if we would run short of oil or have to
use less of it (e.g. to mitigate climate change), a large number of people
might die, which explains why nobody wants to talk about this. And oil is not
the only problem.

There
are many signs that the elites knew about the issues and tried to solve them,
while the wider public and even many researchers were unaware of their true
dimensions.Entirely new billion-dollar industries were built in attempts to overcome the existing
and anticipated issues. Unfortunately, none of them really fixed the world's problems
- each of them created new ones. The automobile industry managed to
significantly reduce fuel consumption per 100 kilometers, but the number of
cars has largely increased. A similar thing applies to air traffic. Each flight
saves a lot of fuel, but the number of passengers and miles travelled increased
a lot. Electricity production turned from oil-based to nuclear technologies,
but besides the risk of nuclear accidents (as in Chernobyl and Fukushima), two
problems have not been solved: the long-term storage of nuclear waste and the
threat of nuclear terror attacks ("dirty bombs"). Nuclear fusion (as
it is, for example, attempted by the ITER reactor) would potentially solve
these issues, but it is still in an early stage of development - far from
industrial-scale energy production. Long pipelines have been built to replace
oil by gas. However, deliveries in Europe suffer from political uncertainties
(the situation with Russia and the political instability in North Africa).
Besides, burning gas contributes to climate change, which endangers one sixth
of all species(that would be the biggest mass extinction since the death of dinosaurs). Worse
comes to worse, it endangers the global food system as well.

Solar
power is the great hope, but depends on regions with a lot of sunshine hours such
as Africa. In fact, the DESERTEC project wanted to invest 1000 billion dollars
to produce energy for entire Europe, but the project collapsed due to the political
turbulences caused by the Arab Spring. The Arab Spring was triggered by high
food prices, which were a side effect of biofuel production (which started to
compete with food production), combined with financial speculation.
Unfortunately, biofuel production also contributes to deforestation and land
erosion. Using special bacteria to turn unused biomass into fuel appears
promising, but does not seem to reach sufficient production rates so far.
Furthermore, large wind parks have been built to generate electricity, but
electricity production is spiky, i.e. it requires efficient storage, which has
been lacking in many wind-rich regions. Novel battery systems to store electrical
energy now seem to provide a solution. However, it is not quite clear how
efficient and environmentally friendly the production and recycling of such
battery systems is. The
recent use of fracking technology looks like a desperate attempt to prolong the
era of the oil-based economy, but it has serious side effects on the
environment and health, and
causes man-made earthquakes. Despite all this, I am confident that energy
production will not be the main resource bottleneck in future. We need to
understand, however, that there is not one solution that fixes all our energy problems,
if we would just roll it out globally. Instead, we need to engage in diverse
approaches, in local energy generation (particularly of solar and geothermal
energy), in matching energy production and consumption better (with so-called
"smart grid" solutions), and in a new lifestyle (as discussed below).

However,
energy is not the only thing that counts. In other economic sectors, we have
made much less progress with the buildup of a low-carbon economy. For example,
the food, chemical and pharmaceutical industries largely depend on oil. In
particular, oil is needed for the production of fertilizer. Fertilizer also
depends on nitrogen and phosphorus - two elements human are currently
overusing. Furthermore, soil is degrading in many areas of the world and
becoming more arid. Water shortages are impending. This is partly due to
intensive meat production, which implies further problems (not just ethical
ones): it makes antibiotics less effective. Multi-resistant bacteria are
spreading and may cause a global pandemic of pre-antibiotic scale, killing
millions of people. The amount of vegetables produced has also increased a lot.
Part of this success is based on genetically modified organisms (GMO). However,
some of the most used poisons in agriculture seem to have unwanted side effects.
Insect species, in particular bees that are enormously important for food
production, have been enormously reduced.In
humans, the rates of obesity, diabetes and various kinds of cancer have
significantly increased. It is certainly true that humans managed to reduce
some of the world's hunger and to increase life expectancy, but it is far from
obvious how we can cover the increasing costs of our health system and sustain
the world's population, which has quickly grown.

The
financial industry is in trouble, too. Some people are convinced that the
financial crisis in 2007/08 was triggered by skyrocketing oil prices, which
made the production and consumption of certain products increasingly
unaffordable. Others see demographic reasons. The use of anti-baby pills, they
say, has reduced the size of the younger population, so that there are less
people who can invest in stocks and houses. In fact, the financial meltdown
started with an overvalued real estate market in California. This eventually
triggered a financial crisis around the globe, an economic crisis, and a public
spending crisis, which we have not managed to overcome yet. As a result, inequality
has largely increased. It will actually soon reach levels greater than before
the French revolution, which raises concerns about the possibility of social
instability and political unrests.

Some
may argue that this inequality reduces the pressure on scarce resources.
However, today's kind of capitalism cannot work without perpetual growth (which
is a side effect of having to pay interest rates for loans). Consequently, the
current economic system is in a danger to collapse. The Federal Reserve, the
European Central Bank and other National Banks are literally pumping trillions
of dollars into the economy to prevent this from happening. However, the money
did not boost new production sites, companies and business models to the extent
needed in order to create a booming economy. Instead, there are large
unemployment rates in many countries, particularly among young people. The
OECD, the WEF and the IMF are all pointing out that inequality has reached a
level that harms our economy.

...but when
small- and medium-sized companies disappear, the backbone of society is
damaged.

Currently,
62 people own as much as the poorest half of the world population. In
principle, I do not have objections against rich people or inequality, but when
small- and medium-sized companies disappear, the backbone of society is
damaged. The current problem is that the average spending power has become so
low that many firms cannot sell their products well anymore. This is bad for
companies and the economy. It is bad for people and our society. To make us
spend more money, interest rates have been steadily reduced by the FED and
central banks around the world, but instead of consuming more, people are
losing their savings for difficult times,which
fuels populist movements. In the meantime, the interest rates have effectively
reached a value of zero, more or less. This means that capitalism 1.0, which
was built on competitive mechanisms (such as interest rates) and on mass
consumption, is basically dead (as financial experts say themselves).

In other words: our current system is broken, it will not work much longer. Attempts to cement the outdated world order of the 20th century with secret agreements may be highly counterproductive for the future of our world.[1] To keep people in check and society under control, governments have built powerful surveillance and control system. We may also see a rationing of resources. Such a system would correspond to Communism 2.0 (if organized by governments) or Feudalism 2.0 (if organized by multi-national corporations). In more serious scenarios, a nine- or ten-digit number of people could die from hunger, disease or war. The scenarios discussed in connection with future resource shortages are depressing and sad. It is increasingly obvious that our economy will run in an evolutionary dead end, if we go on as before. We can certainly not allow this to happen, given that the lives of so many people are at stake. Before I explain, how we can mitigate our problems by means of democracy 2.0 and capitalism 2.0, I will discuss, how we got ourselves into so much trouble that we must probably talk of "systemic failure".

How the systemic failure
came about

Multiple institutional failures are actually quite typical in times
when a society undergoes a transition from one historical age to another. We
have seen this in the past, when the agricultural society was replaced by the industrial
society, and when the industrial society became the service society. Now, we
are in the middle of a transition to the digital society. History tells us that
these transformations tend to come along with financial and economic crises,
with revolutions and wars, but after the respective transformation has been
accomplished, further growth occurs. This time, we need to be smarter. We must
avoid another revolution, war, or holocaust. We must reinvent and re-organize
our socio-economic system before it
collapses.

History tells us that
these transformations tend to come along with financial and economic crises...

While the agricultural society was ruled in a top-down way by kings,
the industrial society was self-organized in a bottom-up way by entrepreneurs,
and the service society was run by administrations. I am convinced that the
digital society will soon be based on collective intelligence. Before this can
happen, however, we need to create a suitable framework for it (democracy 2.0
and capitalism 2.0, as I will argue). If we go on as before, however, our
problems will further intensify until systemic collapse is inevitable.

It is important to understand that this collapse can result even
when everyone applies the established success principles of the past and has
the very best intentions. Politicians, for example, may try their best to
listen to the interests of people, but they can talk to just a few of them.
Therefore, they will most likely talk to people representing a lot of other
people, for example, industrials. This will automatically lead to politics that
is oriented primarily at economic interests. Particularly in times of scarcity,
this seems to be the right thing to do. If Maslov's pyramid of needs were
right, food and shelter would be the main thing to care about, and everything
else would become secondary or even less important.

Consequently, the job of entrepreneurs would be to minimize the use
of resources, which seems to speak for committing to "economies of scale",
i.e. mass production and monopolies. In fact, every industrial sector has
learned to minimize the use of valuable resources. Cars and planes run on less
fuel. Food contains more and more materials that we would not have called food 40
years ago. Similar trends can be observed in other economic sectors.

Today, more than a billion people have more comfortable lives than
kings used to have just a few generations ago. Thanks to the access to global
resources and rationalization, the economy grew and grew. The public media
produced the culture of materialism and consumerism, which made it happen. In
fact, our economy had to grow,
because it builds on loan-based investments that require lenders to pay an
interest rate to the banks. Banks had to make money to exist. Scientists and
engineers invented as told within the framework of the current system, and
largely oriented themselves at subjects that would allow them to raise third-party
funding from companies.

All in all, everyone did what they were supposed to do, but the economy, politics, science, and our lives were more and more dominated by one single dimension: economic efficiency. Nevertheless, since the financial crisis, this economic system has come to its limits. Globalization does not progress anymore.[1] Central banks pump trillions of dollars into the markets, but this money does not reach the average customer and does not boost real investments as expected. So far, all desperate attempts to restart the engine of the world economy have failed. The game seems to be over. After the next financial and economic crisis, which some people expect to come pretty soon, we will probably face similar conditions as in the 1930's. Politics has already prepared for this: by investing in surveillance systems, weapons and detainment camps, but also in new kinds of propaganda and censorship systems to keep people in check - every one of us (using big nudging, social media filters, and social bots, for example). The Sustainable Development Agenda of the United Nations does not exclude such measures. In fact, the Agenda 2030 calls for "strong institutions". One should keep in mind, however, that strong institutions can be very harmful, if power falls into wrong hands or inappropriate actions are taken. For example, in a state of emergency, it often happens that measures not legitimated by the public, by science or previous success, are applied, but it is impossible to prevent them. A politics of empowerment, in contrast, which enables citizens to help themselves, each other, and contribute to solutions (by means of democracy 2.0 and capitalism 2.0, for example) seems to be more promising to master the challenges of the future in a reasonable way. In particular, the past has shown that, narrowing down the solution approach to one criterion or a few such as security or economic efficiency, which is often done in systems under stress, deteriorates the situation and causes the system to fail.

Future scenarios

The question is, what will happen now? Several scenarios spring to
mind:

Global war (WW 3): One possible and not entirely unlikely scenario is global war.
Besides atomic war, we may see biological warfare (through the spread of deadly
diseases), chemical warfare, or digital warfare (cyber war to make the
information infrastructure dysfunctional). Each of these variants would be
similarly devastating. Digital warfare seems to be less destructive, but would actually
cause societal collapse through cascading failures. As a result of any of these
scenarios, hundreds of millions of people could die - it would be a true
Armageddon.

Global pandemic:A deadly disease may naturally emerge and spread. In fact,
epidemiologists are expecting a large-scale pandemic already for some time. A
new concern is the spread of multi-resistant bacteria. In other words,
antibiotics become increasingly ineffective, as they are overused in industrial-scale
meat production, which allows bacteria to adapt.

Euthanasia: Based on a citizen score, it would be decided who will get what
kinds of resources (e.g. immunization shots and medicine, meat, or other
resources that we may run short of in the future). Some experts consider to
have computers or
"superintelligent systems" make and execute such decisions, for
example, with the help of implants.

Revolution:Economic and political instability may lead to social unrest and
revolutions. Elites, which have failed to stand up to their promises, and their
immediate beneficiaries would be killed or imprisoned for corruption. Their
accumulated resources would be redistributed to relieve the scarcity of
resources. If the resulting political system would use material resources more sustainably,
a lot more people may survive and live on.

Citizen score: When running short of resources, a supercomputer using artificial
intelligence technology would be employed to decide who would get how much of
what resource, given previous behaviors, merits, and usefulness for society.
Such citizen scores are already used in China to determine the payment
conditions of loans, the kinds of jobs one may get, and the travel visa to
other countries. The citizen score depends not only on consumption patterns,
but also on the political attitude (as documented by the Internet links clicked)
and by the behavior of family and friends. In effect, such a system would
create a caste society: some would get everything they want, others would have
no chance to get certain kinds of resources.

Many people care more about a
meaningful life than about a high material standard of living.

Basic income: In order to counter the rise of populism, extremism and social
unrest, governments may decide to pay everyone a basic income, and allow them to
earn an additional income by paid work. This would substantially reduce
peoples' fears to lose their jobs (which may happen due to the quick spread of intelligent
machines and automation). It would also allow people to experiment with new
kinds of production and business models. Many people care more about a
meaningful life than about a high material standard of living. A lot of them
would turn to creative and innovative work. The demand for material resources
would go down considerably, if we had a new Zeitgeist
focused on the immaterial sides of life. After all "the best things in
life are free."

Given that pumping trillions of dollars into the
financial system in a top-down way by the central banks has not achieved the
declared intentions...

I further believe that basic income (plus a new Zeitgeist)is the best
and only acceptable (responsible, legitimate) solution among the scenarios
discussed above. It comes closest to "business as usual". This,
however, is also the greatest drawback. Below I will propose a considerably better,
data-driven solution. As this solution is not yet ready for use though and
still needs to be implemented, we may need an intermediate solution to bridge
between today's system and the future system. "Helicopter money", as
it is currently discussed by economic and banking circles, may be such an
intermediate solution. Given that pumping trillions of dollars into the
financial system in a top-down way by the central banks has not achieved the
declared intentions, it is now justified and necessary to try out new and
unconventional approaches such as the bottom-up infusion of money (as
helicopter money tries to achieve).

The way out: There is a
better, alternative future

It seems that, in the past decades, many people did not pay enough
attention to the question why we have such a terribly unsustainable system in
the first place. On the one hand, we have been "brainwashed" to think
that "everything is ok" (or at least will be). On the other hand, our
political and innovation systems have encouraged creative people to innovate
within the existing system, but not the system itself. The orientation at
scientific performance indices, the requirement to raise third-party funds, and
the institution of peer review encouraged this. Now, we are lacking
alternatives and it has become a matter of life or death. However, it is highly
unprofessional to fixate ourselves to the system that we have at the moment.
There could be many more financial, economic, social and political systems that
we have not explored yet - most likely many better ones.

My point is: we should engage in systemic pluralism and should be much more experimental.

My point is: we should engage in systemic pluralism and should be
much more experimental. In fact, with virtual worlds and multi-player online games,
we have now the technologies to make large-scale experiments with many
different kinds of systems before we implement them. For example, financial
systems serve to coordinate the use of scarce resources, i.e. to decide who
will get how much of what resource. However, there are many different
coordination systems that can accomplish this task, and probably many better
ones. The current system matches supply and demand on average, but not in
detail. As a consequence, we have both, hunger and obesity in the world, which
is bad for billions of people. Mechanisms used to decide about organ
transplants or to run smart grids are much more sophisticated in matching
supply and demand (they do it in a context-dependent way).

Today's financial system has major flaws. Not only is it prone to
devastating cascading effects. It is also essentially one-dimensional. As a
consequence, the only possible temporal evolution is to go up or down, which
automatically produces booms and recessions. Furthermore, it ranks every person
and every country on a one-dimensional scale. Therefore, there are
automatically winners and losers. This makes the current financial system a
control system rather than a system empowering everyone to do business and
thrive.

Moreover, since we give more and more weight to economic issues (as I elaborated above), we end up projecting the complexity of the world on one
dimension.

Moreover, since we give more and more weight to economic issues (as
I elaborated above), we end up projecting the complexity of the world on one
dimension. Money makes the world go round, and all that counts is making money.
This is known as utilitarian approach and leads to an oversimplified management
of our complex world (often characterized as "linear thinking").
It is the one-dimensional optimization implied by today's financial system,
which gradually corrupts the functionality of complex dynamical systems such as
our society, which then causes major failures. For humans and societies many
things matter. Neglecting some of them leads to low economic performance and
societal dysfunction. It is well-known that the most diverse economies and
societies perform best, not those that have the simplest organization.

In fact, we should understand our financial system, the economy and
society as complex dynamical systems, where many components (e.g. people,
companies and institutions) adapt to each other. Such systems can only be managed
well with multiple different "control variables". To illustrate this,
take another complex system: our body. We cannot live just on one thing, say
water. We also need oxygen, carbohydrates, different kinds of proteins,
vitamins, and minerals. They cannot just be substituted for each other. The
shortage of any of them will cause a disease. Healing a disease will require to
take medicine, but the right one. More of that medicine will not produce better
results, but may poison the body. The right medicine needs to be taken in the
right amount and at the right time, and there may be unfavorable interaction
effects with other medicines, which need to be considered as well. The same
applies to our society. There is not one medicine (money) that can cure all ills.
Instead there are many things that matter, but these have been increasingly
neglected as compared to money (GDP per capita), and that is the true reason
why our economy and society are about to fail.

So, what to do now? We need multi-dimensional money - a system that
I will discuss later in connection with capitalism 2.0 and finance 4.0. As
Albert Einstein said: "We cannot solve a problem within the paradigm that has
created it." We need a paradigm shift. In fact, this paradigm shift is
already on the way. In the heart of capitalism, we have seen disruptive change.
Since the invention of Bitcoin, we have the bottom-up creation of money.
Moreover, Uber and AirBnb are new shootings stars of the digital economy.
Surprisingly, the biggest service providers of transportation and shelter do
not own any vehicles or hotels. They just coordinate people and resources more
efficiently. With the spread of such sharing economy models, access to services
becomes more important than owning material property. A similar thing applies
to the music and movie industry, where the business model of streaming seems to
replace buying and lending. I, therefore, predict that principles of the
sharing economy will be central to future capitalism.

The exact framework will still have to be sorted out. From my point
of view, doing this now is much more important than establishing free trade and
service agreements. The last decades have shown that more efficient production
and big solutions, which generate the greatest revenue, do not fix the world.
We have rather to engage in diverse, mutually complementary solutions, which
requires the creation of an information, innovation, production and service ecosystem. As small and medium-sized enterprises
are the backbone of thriving economies, it is necessary to revitalize them.
Remember that the most diversified economies thrive most. It is also becoming
increasingly obvious that the civil society can play a much bigger role in
addressing the challenges of the future. Citizen Science, the maker community
(using 3D printers and other cheap technologies to produce complex products
themselves), open data, open source, and open innovation are important
developments in this direction.

Last but not least, young generations appear to be different from
previous generations in a number of relevant points: They seem to value a
meaningful job more than making a steep career. They have already a larger
degree of networked thinking. Friends and family tend to be more important to
them than becoming rich. Owning private property is less important to them than
access to good services. All in all, they are probably adaptable to our future.
Moreover, we see new types of companies, which are organized in a bottom-up way
and outperform classical, top-down organized competitors. In other words, a new
economy, a new society is emerging in front of our eyes. We are about to step
into a new era: a digitally empowered, participatory market society.

What can be done now?

First and foremost, we need paradigm shifts and fundamental change,
particularly towards bottom-up and glocal solutions - oriented at global goals,
but implemented locally in a way that fits context and culture. What short-term
action might be taken?

Big Data and Artificial
Intelligence (AI):If properly used, these
technologies can help to identify inefficiencies and better solutions. However,
there are a number of potential pitfalls one needs to pay attention to,
otherwise one may produce more harm than good. It is also important to
realize that even superintelligent systems will not solve all problems of the
world (for example, problems related to friendships, social capital, culture,
unemployment or peace).

Water: Given that the production of one portion of meat requires between
800 and 2000 liters of water, an efficient way of reducing water consumption
would be to lower the consumption of meat. In fact, vegetarian and vegan
restaurants are increasingly "in". It would certainly help, if there
were "vegetarian chef" shows on TV and every restaurant menu would
start with a page with tasty vegetarian dishes. Modern meat replacement
products based on soy and other ingredients also seem a promising way to go.

Food: Eating less meat also makes it easier to feed the world population.
Growing vegetarian food requires one tenth of the energy required to produce
the same amount of calories from meat. Further attention must be paid to the
regeneration of soil. Suitable planting cycles for food can help. Furthermore,
"urban mining" allows one to recycle the scarce resource of
"phosphorus". Nitrogen can be extracted from air. Therefore, the
production of fertilizer may be sustained for a longer time. Besides, better
logistic may make 50 percent more food available, which is wasted today. Last
but not least, urban gardening, local supply chains and local cuisine are
becoming new trends.

Reproduction Rates:With the spread of Artificial Intelligence and Virtual Reality
technology, reproduction rates will go down for at least two reasons: (1) In a
few decades, humans will not anymore be the smartest species on Earth, the
"Crown of Creation". (2) Virtual Worlds will become more interesting
than our physical world. The current trend is that young people interact with
each other more through the Internet than in physical space, which does not
produce offspring.

Reduction of "climate
gases": Approximately one third of carbon
dioxide (CO2), which seems to be a major contributor to climate
change, results from transportation, one third from industrial production and
one third from heating. The latter can be reduced by better insulation and by
reducing the amount of space heated (or other heating technologies such as
infrared heat, which primarily warms up organic matter). Air transport of goods
can be increasingly reduced by local production (including 3D printing).
Holiday trips by plane may be replaced by local leisure activities. Virtual
reality and the new technology of holoportation will, in principle, allow
everyone to enjoy any place in the world at home.

Furthermore, car traffic can be reduced dramatically. Google (now
Alphabet) is planning to offer "transport as a service" using
self-driving cars. This may reduce the number of cars needed to about 15
percent of the number today, without any loss of mobility. It will also reduce
the number of garages and parking lots needed, etc. In other words, the
consumption of materials to offer high-quality mobility will drop dramatically.
In a further step, we will see a sharing of work space and space for living.
Today, we live at home half of the day and we work in another place half of the
day; in between we commute and do other things. This is highly inefficient.
Robotic furniture will enable reconfigurable space in the sense of working and
living. Virtual reality and holoportation technology will enable remote teamwork.
Furthermore, coffee shops are starting to offer working environments for
business meetings. All in all, this will lead to less commuting, more efficient
use of urban space, and attractive, walkable, livable cities.

Methane is another climate gas to care about.Reducing meat
production will also lower the emission of this gas.

Energy: Wind power combined with battery storage systems, solar power and
geothermal power are most likely our sustainable energy sources of the future. It
will be also important to save energy and match supply and demand better. Smart
grid technologies, combined with electrical cars (as power storage systems),
are making significant progress in this direction.

Altogether we see a tendency towards decentralization in energy production. Since globalization is
hitting its limits, this is also found in production (with reindustrialization,
3D printing, etc.). In the financial system decentralization is occurring, too
(with BitCoin, crowd funding, etc.). The trend points to more diverse rather
than big, "one size fits all" solutions. Cities around the world with
similar interests will build coalitions to solve their problems together. We
could also organize city olympics, i.e. competitions for the best kinds of
technologies, solutions, and city-wide implementations, driven by ambition,
competition, engagement and fun.

Innovation: Given that we have not seen enough innovation to solve the
impending resource issues, we need to massively improve on innovation. All
obstacles have to be swiped out of the way.

Academic institutions must be put in the position to work with the
data they need and the latest technologies. The equipment of many universities (and
schools) today is outdated, and the organizational framework does not keep pace
with the speed at which our reality changes. Education needs to get
personalized, and the use of Virtual World technologies and gamification can
make learning rewarding and easy. Research should be freed from political and
economic dependencies. The funding system should be changed from funding of
promises to refunding for successful publications and deployments.
Interdisciplinary research centers for research on complex systems and Global
Systems Science should be massively supported. Talented junior researchers
should be able to work on the subject of their interest, get a longer-term
perspective and be able to join the research team they like (which should come
with an overhead for the receiving institution).

In the digital economy (concerning non-material goods and services)
there should be no patents, or they should be opened up for everyone after a
maximum period of two years.
After this period, the software code should also be made open source.
Copyrights should be replaced by a simple gratification system. For example, it
would be possible to develop a special search engine that compares new files with
older ones to determine their degree of similarity. The result could trigger an
automatic payment to gratify creators of new ideas, services and products. Such
a system would massively promote open innovation.

Patents concerning the material economy should be opened up for a
reasonable fee to everyone. It should not be possible to buy a patent or company
to take competitive technology from the market. More general, any unused resource should be opened up for the use by others for
a reasonable compensation.

I think these changes are necessary and justified, given that we are
talking about the future survival of a lot of people. We also need to engage in
mass innovation. Therefore, it is recommended to support citizen science, the
maker community, and similar initiatives that are committed to open data, open
source, open innovation, etc. For example, an international Culturepedia
project could identify the success principles underlying the diverse cultures
of the world and operationalize them. This would allow people from all over the
world to learn from each other and to combine their success strategies in
entirely new ways such that better solutions to existing problems would be
generated.

Democracy 2.0 and
capitalism 2.0: the perfect couple

By now, it has become clear that we need much better solutions to
the world's problems. The challenge is that nobody can fully grasp the
complexity of today's world, and that many actions we take have feedback, side
or cascading effects. How to come up with better solutions? We need to put the
best knowledge and ideas of the greatest minds (and of artificially intelligent
systems) together, i.e. we need to create collective intelligence. Research in
the area of collective intelligence shows that the combination of several
solutions (e.g. a simple average) often performs better than the best
individual solution. A precondition for this is that the individual solutions
are diverse and independently produced (which speaks against "big
nudging", as it tries to align perspectives). In other words, diversity
beats the best. The Netflix Challenge, for example, demonstrated this in a very
impressive way. All in all, if we replace top-down decisions and majority
decisions by a collective intelligence approach, solutions to complex problems
will be much better.

This insight calls for a digital upgrade of democracy: democracy
2.0. As I said before, it is not majorities of people that matter for good
outcomes, but the diversity of ideas. In other words, to improve over today's
solutions, we need to take more minority and opposition perspectives on board.
If organized well, this does not have to slow down decision-making - on the
contrary. Online deliberation platforms
now offer the possibility to put all arguments on a virtual table, to organize
them in argument maps and identify the different perspectives. Once this has
been done, it is time to organize a round table, where the leading
representatives of the different perspectives are invited to develop integrated solutions, which bring
several perspectives under one roof. In the end, the parliament would select
one or a few solutions that satisfy many perspectives. I suggest to choose as
many best practice solutions as needed to reach a majority of about two third
of all elected representatives.
From this set of most promising solutions, the relevant communities (e.g.
nations, regions, cities, or spatially distributed interest groups - depending
on the level of organization) would then choose the solution, which fits their
local needs and culture best. This procedure would create an optimal balance
between standardization and diversity.

The performance of the implemented solutions and the relevant
success factors would be evaluated from various perspectives. Inferior
solutions would be replaced by better ones, and the best solutions would be
further improved based on the experience made. This approach would capitalize
on creativity, science, and intelligence (including AI), on crowd sourcing,
deliberation, and success principles of nature, namely experimentation in
niches and selection. The proposed approach combines bottom-up and top-down
elements in an innovative way. It is also well compatible with a federal (region-based)
organization and with the well-established subsidiarity principle. Considering
the current centrifugal forces in the European Union and the growing
polarization in other countries (e.g. between rural and urban areas, or between
groups with different subcultures), it becomes increasingly clear that the
over-standardized "one size fits all approach" (as decided by the
majority or most powerful) does not work anymore. If we do not upgrade
democracy by governance 4.0, as
described above, we are likely to see catastrophic failure, i.e. the
fragmentation of political units or social unrest.

An important element in this renovation of our political system is
to enable citizens to make better decisions. This requires more access to
high-quality information for all and more awareness. With the aim of making progress
in this direction, my research teams at ETH Zurich and TU Delft, together with
partnering teams at other universities, have started to develop the Nervousnet platform (see nervousnet.info).
Our role models are Linux, Wikipedia and OpenStreetMap. The Nervousnet platform allows people, companies and devices
to engage in three ways: (1) by generating and contributing data, (2) by analyzing
the crowd-sourced datasets, and (3) by sharing code and ideas. In other words,
Nervousnet's goal is it to provide real-time data for all and an App-Store for
Internet-of-Things applications. Anyone
is able to create data-driven services and products using a generic programming
interface. The aim is to yield societal benefits, business opportunities
and jobs. Nervousnet uses distributed
data storage and distributed control, so that it is more robust to
attacks and centralized manipulation attempts, easy to scale up, and tolerant
to faults. Nervousnet's approach is also compatible with the principles of
informational self-determination and, according to our judgment, with the new
EU Data Protection Directive.

In particular, Nervousnet will be useful to measure external effects
of interactions between people, companies and the environment (so-called
"externalities"). Negative externalities (such as noise, pollutants
or waste) would get a price, positive ones (such as cooperation, new jobs, or
recycling) would get a value. In such a way, a circular economy would be boosted.
Furthermore, we can now build a multi-dimensional
incentive and exchange system, which I call "finance 4.0", using knowledge from complexity science
and new financial technologies (FinTech) such as Blockchain technologies (as it
is used by BitCoin). This will facilitate the creation of feedback loops in the
system. In such a way, it will become possible to support the ability of
socio-economic systems to self-organize in a favorable way.

Note that, in economics, such self-organization processes have
traditionally been called "invisible hand" phenomena. From complexity
science, it is known that self-organization is a natural phenomenon in complex dynamical
systems (such as the financial and economic system), but it does not
necessarily lead to favorable outcomes (as the financial crisis has shown).
However, it is also known that desired structures, properties or functions will
automatically and efficiently occur in case of suitable interactions in the
system. The kinds of interactions, which are needed for this, can be determined
by complexity theory, computer simulations, laboratory experiments, or
multi-player online games. The multi-dimensional incentive and exchange system
mentioned above will allow one to adjust interactions in socio-economic systems
such that desired outcomes will result. In other words, 300 years after its
inception, it now becomes possible to make the "invisible hand" work,
by combining Internet of Things technology with FinTech and complexity science.

The
"finance 4.0" platform will also enable a bottom-up creation of
multiple new currencies by means of crowd-sourcing activities (namely,
measuring externalities). In this way, it will complement the current financial
system and fix its functionality (given that pumping trillions of money into
the system in a top-down way could not reach the desired effects). This
approach would enable an affordable, effort-based living for people without the
need of a basic income or helicopter money. It would also make it possible to
create taxes as basis for public investments. All of this would not depend on
the level of classical employment, i.e. it would be perfectly suited for a
highly automated economy.

The
concepts of democracy 2.0 (based on online deliberation and collective
intelligence) and of capitalism 2.0 (based on finance 4.0 and principles of a
sharing economy) are well compatible with each other. I consider it the
"perfect marriage" between liberalism, capitalism and democracy. This
marriage is enabled by novel digital technologies. The socio-economic system
built on democracy 2.0 and capitalism 2.0 is organized in a participatory,
decentralized and bottom-up way. It offers individual and entrepreneurial
freedom. By considering externalities, it supports environmental benefits, coordination
and socio-economic order with very little regulation (as compared to today).
For the end customer, the consideration of externalities would not be more
expensive on the long run - on the contrary. Products and services would be
better and cheaper, as long-term costs would be reduced.

The
new system would be able to benefit everyone: citizens, politics, and the
economy. It would create new opportunities and sources of income for
individuals, small and medium-sized enterprises, and big business. A
redistribution of money is not implied. The "finance 4.0" system
rather uses the fact that non-material products and services, which will
increasingly characterize the digital economy of the future, are unlimited.
Complementary, sharing and recycling un- and underused material resources will
reduce resource shortages. Altogether, this will allow us to create a higher
quality of life for more people in the world, if we just slightly adapt our
socio-economic framework as outlined above. The proposed systemic changes would
be "minimally invasive", but highly effective, and, therefore, their
implementation is realistic.

The
functional principle of the finance 4.0 system may be illustrated by the
following picture: the current digital economy is a little bit like a desert,
in which there are just a few palm trees (corresponding to a few big IT companies).
The bottom-up creation of money with the "finance 4.0" system will water
the desert and add some fertilizer (compare the different currencies with
different kinds of minerals added to the soil). This will turn the desert into
a rain forest - a highly diverse and interdependent ecosystem (with many
different kinds of companies of all sizes), in which there are more than enough
opportunities for everyone, and where the biggest trees are certainly bigger
than the palm trees in the desert. In other word: the "finance 4.0"
system and a suitable framework for the digital economy (requiring, in
particular, a sufficient degree of interoperability, exchange, and opening up
of currently unused resources for use) can benefit everyone, from the poor to
the rich. It is time to build this novel, future-proof system, before the
current one (which certainly created many benefits but now reaches its limits)
collapses.

Summary, discussion, and outlook

I
have argued that the world may soon be confronted with serious resource
shortages (e.g. of water, nitrogen, phosphorus, rare earths, and other
materials), and that big business and governments have prepared for future
crises. These preparations include mass surveillance, censorship and propaganda
(by means of personalized information, big nudging, social bots etc.), a
behavior-based rationing of resources (potentially using Citizen Scores), armed
police, and detainment camps - measures to enforce public order that seem to be
plausible in a state of emergency. However, I have argued that the totalitarian
systems, which are on the rise, are undermining the innovation that we need to
master our future, and endanger the freedom and diversity that fuel innovation.[44] This
harms the performance of the economic system and the functionality of society, which
can finally lead to economic and societal collapse, as it is unfortunately
quite likely now.

I
have also pointed out that, due to the digital revolution, business models and
institutions are undergoing fundamental transformation. The digital revolution
allows us to reinvent everything, and we will therefore soon live in a
differently organized, digital society. This future will be based on networked
thinking and collective intelligence. The paradigm of selfish optimization (also
known under the label "homo economicus") will not anymore be
competitive with collaborative models of the future, which engage in partnerships
of companies, suppliers and customers, users, citizens, and patients. The
novel, partner-based approach is often characterized by terms like
"co-creation" or "information, innovation, production and
service ecosystem".

The
future digital society is able to benefit everyone, as the resources in the
emerging digital economy are basically unlimited. Due to automation (Artificial
Intelligence, Robotics), the old economy making money by rationalization (using
"economies of scale") will be run with about 50 percent of today's
manpower (if the numbers that 50 percent of today's jobs will soon be gone are
correct). The other 50 percent will eventually produce digital products and
services in the new, non-material economy, which is now emerging. This new,
digital economy encompasses, in particular, Virtual Worlds, which will be used
as "experimental worlds" and for new kinds of business. In other
words, in the long run I do not expect mass unemployment, but we may face
intermediate challenges during the transformation process. This calls for
answers bridging from the old to the new world (such as helicopter money -
until the "finance 4.0" system is fully operational). Without such
bridging solutions, we may, in fact, run into revolutions or wars. However, by
now, we should have learned enough from history to avoid such disasters and to
avoid the repetition of old mistakes.

Besides
the challenges we are faced with, I have sketched concrete solution approaches
and, in particular, an organizational framework of the future digital economy
and society: governance 4.0 and finance 4.0. These will upgrade democracy and
capitalism, and marry them together by means of a combination of new technology
and science: the Internet of Things, FinTech, and complexity science.
Governance 4.0 (using online deliberation platforms) and Finance 4.0
(crowd-sourcing various kinds of money to run a highly differentiated incentive
system) are technologies complementing superintelligent systems. While
superintelligent systems would operate in a top-down way (trying to steer individual
system components), governance 4.0 and finance 4.0 will work in a bottom-up
way, supporting the interaction, self-organization and coordination of diverse
activities and interests, of people and resources. Therefore, sharing economy
platforms are part of the Finance 4.0 solution.

Why
are the participatory approaches of governance 4.0 and finance 4.0 so important?
Because they enable a better use of scarce resources. I claim that not material
resources are our main bottleneck, but the way we are using them. Let me
illustrate this with an example from traffic flow management in cities, where
we have made a remarkable discovery: When we replaced the attempt of optimal
top-down control of traffic lights by a bottom-up approach based on principles
of self-organization, we achieved a 30 to 40 percent higher performance. S How
is this possible? Complex optimization problems cannot be solved in real-time,
even with supercomputers. Therefore, one needs to make simplifications, and the
optimization is made within a certain, simplified solution space. However, some
of the best solutions lie outside of the solution space chosen, no matter what
solution space one may choose (for example, periodically operated traffic
lights, which would have to be optimally synchronized with each other). In
contrast, the self-control approach attempts a flexible adaptation to the
actual local needs. In our approach, traffic flows control the traffic lights
rather the other way round. We build on rules that promote the self-organized
coordination of neighboring traffic lights. In other words: we do not limit the
solution space - we let the system evolve according to its needs and encourage
coordination by the kinds of interactions implemented between the traffic flows
and the neighboring traffic lights.

Why
is this relevant? In urban traffic systems, road capacity (storage space) and
flow capacity are often short resources, and their management is critical, if
massive traffic jams shall be avoided. In our economy, materials are the
resources that may run short. Suppose we run into a situation where we can use,
say, 20 percent less resources than usual. So, assume that everyone would get only
80 percent of the resources that were available before. Then, one may never
have enough resources to produce a certain product, because certain parts or
ingredients would be missing. In other words, a proportional rationing would
trigger second-order shortages and make the situation worse than it would have
to be. Instead, we need a flexible system, where everyone can get 100 percent
of certain resources on some days, but 70 percent on others, to compensate for
this. This corresponds to a turn-taking principle (which actually bears some similarity
with the operation of traffic lights).

Therefore,
a flexible system is able to create more goods and services than one that is
managed in a top-down way.[45] Today,
we know how to build such systems. In connection with congestion and route
choice problems, I have elaborated concepts that can increase the traffic
capacity considerably, based on principles of fairness and flexibility. In
connection with gas supply, it was furthermore elaborated, how fairness can be
reach based on decentralized approaches. Interestingly, symmetrical
interactions tend to support not only fairness, but also optimal
self-organization. Today, however, we still lose about 30 percent or more of
many perishable goods (such as food) due to bad logistics. Improving logistics
along the lines discussed above would allow one to set many of the currently
unused resources free. Rationing resources and applying citizen scores, in
contrast, will reduce the amount of flexibility, and let a socio-economic
system perform badly.

Big Data and Artificial Intelligence are certainly useful tools to
identify inefficiencies and underutilized solutions. However, like any other
tool, they are not solutions for everything. We must also see their limitations
and side effects. The entirely new solutions and paradigms that are now needed to
master our future will not be delivered just by brute-force data mining or
machine learning. We must further see the serious dual use problem of powerful
digital technologies. As they have societal-scale impact, they can potentially cause
much greater damage than a nuclear meltdown or atomic bomb (which is
geographically limited). Think, for example, of a blackout of the Internet for
a couple of days, or even for months, as it might happen as a result of solar
storms ("space weather").

Powerful tools, particularly those with a centralized architecture,
imply the risk of random or triggered failure, and of serious misuse. They are
attractive for organized criminals, terrorists and people with extreme agendas.
We therefore need to be wary of people or institutions who may instrumentalize
future crises to turn democracy into fascism 2.0, communism 2.0, or feudalism
2.0.[46]
To minimize potential misuse by mistake or intention, we must create a suitable
framework, which ensures security, accountability, and transparency; democratic
control, scientific, responsible, ethical and pluralistic use; forgetting,
privacy and informational self-determination. One should also aim at openness
(open data, open source, open innovation) and participatory opportunities to enable
co-creation and benefits for everyone (as much as justified and possible).
Altogether, the goal should be to create an information, innovation, production
and service ecosystem for people, ideas, resources and initiatives, including
an open sharing economy platform. The Nervousnet platform mentioned above could
contribute to the emergence of this ecosystem.

Last but not least, it must be realized that centralized information
systems may not be sustainable on the long run. Cybercrime causes a damage of 3
trillion dollars per year and is exponentially increasing. Adding more devices to
the Internet increases vulnerability. CIA chief Clapper considers the Internet
of Things the greatest threat for the USA. In fact, there is no 100 percent
security anywhere. The US military has been hacked, the Pentagon, the White
House, the German Bundestag, and probably every company, too. The idea that
systems can be made 100 percent secure if we just control them more and more is
a dangerous illusion - and tends to end in a loss of freedom and security. Therefore, we may need a
new security paradigm oriented at resilience, which should be inspired by the
human immune system: even though it is attacked by bacteria millions of times
every day, we live more than 70 years on average. Remarkably, the immune system
is decentrally organized, which ensures that there is no single point of
failure. For this and other reasons, the Nervousnet platform will be a
decentralized system. Error and attack tolerance have been guiding principles since
the creation of the Internet - we should not forget this.

Heading towards the
illuminated age

As
the experience in the past decades has shown, despite great achievements,
technology alone cannot solve our problems. Human behavior and civil society
need to be part of the solution. Citizen science, the spread of the maker
community, open access, open data, open source and open innovation can be
important elements of a more innovative society and a thriving information,
innovation, production and service ecosystem. Until we have created the public
framework of the participatory market society to come, we will go through a period
of troubled waters. However, we should see it as a time of adventure and
discovery, a time where individuals and groups can change the world to the
better more than it has been possible in the past. The resulting data-driven
society will not be run like a giant machine or clock tower, but rather like a
well-coordinated system of diverse and largely autonomous, self-organizing systems,
activities and processes. Among the data-driven societies discussed above, the
combination of democracy 2.0 and capitalism 2.0, enabled by Internet of Things
technology, FinTech and complexity science, is certainly the most innovative
and efficient socio-economic system, and the best possible basis for a thriving
society.

In
the era to come, material goods will be more efficiently produced, thanks to
Big Data, Artificial Intelligence and robotics. Principles of the circular and
sharing economy ("reduce, reuse, recycle") will mitigate or even
overcome upcoming resource shortages. Ownership will become less important than
opportunities to use products and services. Today's mobility may be provided by
less than 20 percent of today's vehicles, and 50 percent of today's buildings
would be enough to provide space for work and life. All in all, cities will
probably become more livable than today.

Besides
the old, material economy, we will see the growth of a new, digital economy.
This will be more or less unlimited, as it is immaterial, and will allow
everyone - from individuals to big corporations - to benefit, if we get the
framework right. We can see already that information plays an ever more
important role in our lives (when measured in number of hours spent with
information systems). Creative products and ideas will become increasingly
important. This also implies that human values will be more important again. It
is clearly visible that people are currently seeking for new ways of leading
meaningful lives. Soon, we will see a new Zeitgeist.

The consumption of immaterial goods and services will increasingly replace the
consumption of material ones, and consumption will become more active, as it is
reflected by the terms "co-creation" and "prosumers"
(co-producing consumers).

Furthermore, rather than maximizing gross domestic product (GDP) per capita, many nations around the globe may maximize happiness, soon. The "economics of happiness" shows that people actually don't need a lot of material resources to be happy: water, shelter, information access, and a meaningful life. The latter requires a society built on values and trust; it requires friendships, opportunities for personal self-development, a good health system, and social security.

What kind of values may be guiding us in the densely connected, digital society of the future? Perhaps the following ones, which are the outcome of extensive discussions I had with many people:

Respect:Treat all forms of life respectfully; protect and promote their (mental, psychological and physical) well-being.

Diversity and non-discrimination: Support socio-economic diversity and pluralism (also by the ways in which Information and Communications Technologies are designed and operated). Counter discrimination and repression, prioritize rewards over punishment.

Freedom:Support the principle of informational self-determination; respect creative freedom (opportunities for individual development) and the freedom of non-intimidating expression.

Participatory opportunities: Enable self-determined decisions, offer participatory opportunities and a choice of good options. Ensure to properly balance the interests of all relevant (affected) stakeholders, particularly political and business interests, and those of citizens.

Self-organization:Create a framework to support flexible, decentralized, self-organized adaptation, e.g. by using suitable reputation systems.

Quality and awareness: Commit yourself to honest, high-quality information and good practices and standards; support transparency and awareness.

Fairness: Reduce negative externalities that are directly or indirectly caused by your own decisions and actions, and fully compensate the disadvantaged parties (in other words: "pay your bill"); reward others in a fair way for positive externalities.

Compliance: Engage in protecting and complying with these fundamental principles.

To summarize the above even more briefly, the most important rule is to increase positive externalities, reduce negative ones, and ensure fair compensation. This might be considered as an operationalization of the golden rule: Behave in such a way, as you would expect it from someone else, if affected by that decision. Shall we give it a try?

This article with full references has now been added in the version ResearchGate. Please click here

[3]
I am convinced that public awareness and involvement must be largely increased,
if we want to be able to come up with better solutions.

[4]
Of course, international trade and service agreements can make a lot of sense,
but they may also amplify existing problems and inequality, too: if the roles
of customers and citizens are not strengthened, such agreements will reduce the
likelihood of new solutions and accelerate the accumulation of formerly public
or widely spread property and power in the hands of a few big companies,
promoting Feudalism 2.0. This seems to be one of the great public concerns
against the CETA, TTIP and TISA agreements, besides the possible weakening of
democracy as well as social, environmental, and legal standards.

[5]
I would like to call this pyramid of needs into question: information,
friendship and solidarity experience all-time heights in harsh times, too.

[6]
The exploitation of celestial bodies is planned, but is not possible yet.

[7]
Depending on the implementation, the resulting system might be considered as
socialism 2.0 or social market economy 2.0.

[8]
The utilitarian approach measures the value of everything in units of money. It
has lead to a one-dimensional optimization, as science and politics and other
societal institutions are increasingly influenced by business interests. The
related lack of a multi-faceted approach has significantly contributed to the
increasing dysfunctionality of many societal institutions, i.e. their
difficulty to fix the problems society is faces with. For example, the
resulting system does not seem to serve the majority of people well anymore, as
elaborated below.

[9]
The issue with big solutions is that, if it (later) turns out that they have
serious drawbacks or side effects, then there is a big problem, potentially a
global-scale one. Diversity hedges such risks and ensures that there are
alternatives, in case one solution fails.

[10]
About one third of food is wasted today, two thirds are used. If we can avoid
wasting food, the world can eat 50 percent more than today without increasing
food production.

[11]
I am aware that this position on patents on copyrights is controversial, but a
policy change is overdue and already happening: Tesla has opened up many of its
patents. Google and others have open-sourced their Artificial Intelligence
software. The recent US court rulings on Google Books supports "fair
use" of intellectual property. The trend to open innovation is clearly
visible.

[12]
Large companies are often weak in terms of innovation (basically, because they
are not flexible enough and "new ideas are the enemies of existing
ones"). This is the reason why big business tends to buy innovative small
and medium-sized enterprises. However, this takes some of the best ideas from
the market, and makes them inaccessible to others. Sometimes these innovations
are not used at all but just locked away. Such a situation is not in the public
interest and does not use resources efficiently. By the way, even though
Alphabet (formerly: Google) pursues a phenomenal number of highly ambitious
projects in the Google [x] lab, it cannot considered to be a counter-example:
over 90 percent of Google's revenues are made with one single product: personalized
information and ads.

Sources and references will be added in the version soon
appearing at ResearchGate.

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The activities leading to these results has received funding from the European Union Seventh Framework Programme (FP7/2007-2013) under grant agreement n° 284709 - project 'FuturICT', a Coordination and Support Action in the Information and Communication Technologies activity area